'Titanic' is a symbol of the future in the docks of Belfast

Belfast has an engineering history.

What it engineered famously for the best part of the past 50 years was disaster and tragedy. So what were the developers thinking of when they chose to name the regeneration of the old engineering heartland of the city – the Harland and Wolff shipyards – after the most famous maritime disaster ever? The Titanic Quarter will cost £7bn and aims to provide more than 7,500 homes and 25,000 jobs. The development is ambitious and, in parlous economic times, it will need its share of luck. So why raise the spectre of the Titanic? Why make a point of smashing mirrors and walking ostentatiously under ladders?

RMS Titanic was launched from Slipway Three in the Harland and Wolff yard at 12.15pm on 31 May 1911 – a century ago this week. The 880ft ship was a triumph of Edwardian engineering, the largest and most luxurious passenger liner in the world, and the source of huge pride in the city of her birth. When she sank less than a year later on her maiden voyage the shock wave hit hard.

"There are stories of the day when the news came back to Belfast," explains the Rev Chris Bennett, a chaplain in his day job, who conducts the Titanic walking tour, "there were men walking the streets – floods of tears streaming down their faces. They just couldn't believe it, but after that initial wave of grief it was the elephant in the room. Among the people who worked on it – it was never mentioned again."

Then in 1985 Titanic was located. "As they forensically examined the wreck," says Chris, "the fundamental conclusion was that there was nothing wrong with the workmanship. The damage done would sink even a modern cruise liner." This verdict helped to revive some of the pride the city had once taken from its association with the ship. And after James Cameron's 1997 weepy released a huge surge of international interest, Belfast was ready to reclaim its dark secret. A catchphrase started appearing on merchandise in the city's souvenir emporia – "She Was Alright When She Left Here."

The walking tour of the new quarter on Queen's Island gives a foretaste of the biggest regeneration project in Northern Ireland. On completion, the 185-acre site will also be the largest waterfront redevelopment in Europe. Running through the heart of it is the Titanic Signature Project – a ribbon of visitor attractions and "heritage assets" that tell the story of the ill-fated ship and place it within the context of the city's shipbuilding and maritime traditions.

The clunkily named but eye-catching Titanic Signature Building (TSB) – a museum – is taking shape on the waterfront right next to the slipways where the Titanic and its sister ship, Olympic, were assembled. The TSB is shaped like a four-cornered star, recalling the logo of the White Star Line (five-pointed actually, but why quibble?), each of the corners also resembles the famous bow of the Titanic. The building is clad in faceted, three-dimensional zinc plates that shimmer and reflect light into the surrounding water. It is already a landmark.

Sadly, for future visitors, they won't be able to experience the goosebump-inducing interiors of the currently derelict Harland and Wolff offices where the Titanic was conceived – they are due to become a luxury hotel adjacent to the TSB. Technically, the building is not open to the public even now, though the walking tour has access.

Leading us into the design hall, Chris points out where Thomas Andrews, the Titanic's designer, worked. "He would have put together the huge parchments with every wiring diagram, the plumbing, the engines, every last bit. And it all happened right in this room. If you're wondering what it looked like in Titanic's day – the answer is it looked pretty much as it does today." I think not. The barrel-arched roof of the Italianate hall is graceful enough but the paintwork is peeling and fissured, the plaster has holes, wires hang off the walls, there is evidence of water damage and pigeon domesticity. It's not a usable space but it is ghostly and evocative – connecting more directly to the Titanic in its disrepair than it ever will as the lobby of a smart new hotel.

New hotels are springing up across town. They are in effect an index of the new confidence that imbues Belfast, consigning the days when the city could boast the dubious distinction of having "the most bombed hotel in the world" (the long-suffering Europa) to a fast receding past. Among the smartest of the new breed is the Merchant Hotel in the Cathedral Quarter. It is a fully fledged five-star that reworks the high Victorian pomp of the former Ulster Bank HQ – diners with a taste for fat rococo cherubs and gilded Corinthian columns will enjoy the outrageous camp of the restaurant that now occupies the old banking hall.

The new art deco-styled wing of the hotel (opened in summer last year) is more restrained – just. The two-storey-high Tamara de Lempicka-inspired tapestry in reception is startling, as are the bordello-chic photos of kohl-eyed flappers flashing the odd nipple that decorate the corridors and rooms. Staying here does make you feel slightly fabulous and naughty. The hotel is perfectly situated for a big night out in what should by rights be one of the party capitals of Europe.

It is fair to say that if you can remember every bar visited during an evening of revels in Belfast, you are doing it wrong. So, this is an approximate reconstruction. My messy evening started (I think) at The Duke of York, a traditional pub with live music and bibulous crowds spilling into the alleyway, it may or may not have included the Spaniard, it definitely stopped for a quick Guinness or three in the Cloth Ear, where the conversation with Marty, Chris and a crew of nameless (and legless) mates turned to beery philosophising about sectarianism. The phrase "Dogma is the packed lunch of ideology" was uttered by someone to loud general acclaim. But its profundity or otherwise was instantly lost in a fug of alcohol.

We progressed across the road to 21 Social, by day a gastro-pub, by evening a four-floor danceteria inhabited by a high proportion of orange complexioned women who seemed to have escaped from The Only Way is Essex reality show. The evening was shaping up nicely and then at 1am we were all thrown out on the street. That was it. Saturday night was concluded, the craic was curtailed, Belfast was closed, everyone started shuffling home – all because the city's licensing hours remain antediluvian. Belfast has all the pre-requisites for great nightlife – not least inhabitants who are genetically modified to be warm, welcoming and gregarious – but just as the party got started, it was over.

In the morning a friend takes me on a sobering drive of the city's most unlikely tourist attraction – the Troubles. On Cupar Way the so-called "peace line" separating the Protestant/Loyalist Shankill from the Catholic/Republican Falls areas of west Belfast is a vivid reminder that the Troubles are not easily consigned to the history books. The wall is a monster – a brick base surmounted by metal boards and topped by a third tier of wire mesh to a height of 30ft – it has outlived the other, more famous, wall in Berlin.

It is a preternaturally sunny day and an open-top tourist bus is making its way along the "Protestant side", tourists snapping away at the colourful graffiti that now adorn the base of the wall. The scene seems innocuous, the barrier a relic, until we make our way through the opening at Lanark Way to the "Catholic side".

There is no graffiti on the wall at the Clonard Martyrs Memorial Garden. Under a flying tricolour, the "Roll of Honour" of the 2nd Battalion of the IRA's Belfast Brigade is fixed to the brick base of the wall. I recognise the names of "Volunteers" Danny McCann and Sean Savage, shot dead by the SAS in Gibraltar in 1988, carved in the stone. This was the infamous "Death on the Rock" incident that set off a brutal chain of events marking a new low in a very dirty war.

The well-tended memorial is in Bombay Street, one of the earliest flashpoints that initiated the Troubles. A gable-end poster shows the street in flames when it came under attack from Protestant mobs in August 1969, accompanied by the words "Never Again". Viewed from this perspective, the wall seems to have a grim permanence.

In this city, regeneration is loaded with significance. The Titanic Quarter is not just a property development, so far as the Rev Bennett is concerned. "To me, personally, it is a fresh start for the city," he says. "We've come through everything, we've come through in the past century and the cultural desire to start over, to do things differently is just overwhelming."

Aside from conducting the walking tours, Chris Bennett is setting up a cross-denominational church in the quarter called The Dock. "The Titanic Quarter is a blank page," he says with evangelical zeal. "Whatever history there might be to do with the dockyard – obviously there was some Protestant-Catholic stuff – in terms of people living here and owning this space it is a blank page. It is a new start for us. Our challenge is to be able to make a new identity for Belfast which sets aside all those old divisions."

The reverend sells a good story with a happy ending. While the ship itself rests two miles down in the freezing waters of the North Atlantic, raising the Titanic in Belfast as a symbol of a "shared future" seems an inspired idea.

Compact Facts

How to get there

Sankha Guha travelled to Belfast with Flybe (flybe.com), which offers fares from £29.99 each way. He stayed at The Merchant Hotel (028-9023 4888; themerchanthotel.com), which offers rooms from £140 per night.

Further information

Titanic Quarter (titanic-quarter.com). Tourism Ireland (discoverireland.com).